If Two Countries Each Are Currently Producing Two Goods, and Each

question 138

Multiple Choice

If two countries each are currently producing two goods, and each begins to specialize in the good in which it has a comparative advantage, what will happen to total world output?

• A)​It will increase.
• B)​It will decrease.
• C)​It will be unchanged in both countries.
• D)​It will rise in one country, and fall in the other, but the total is unchanged.

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Definitions:

Adjusting Entries

Adjusting entries are journal entries made at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred.

Worksheet

A paper or digital document used to organize data and perform calculations, often preliminary to the preparation of financial statements.

Ledger

A group of accounts that records data from business transactions.

Withdrawals Account

An account used to track the money that an owner takes out of the business for personal use, also known as draws.